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Mineral Property feasibility Studies 235

and the recommendations of the project team. Other items will be planned, scheduled, and budgeted. Learning-curve
that should be covered (if studied by the project team) include estimates will be applied toward the production buildup, so
project funding and the business plan with market and com- the estimated production will be on schedule and project eco-
petition analysis and strategies. Any outstanding major issue nomics will be preserved. An example outline of Volume 5,
involving government agencies related to utilities, transpor- Operating Plan, is found in Appendix 4.7E.
tation, land, royalties, or potential project partnerships must It is this DBR document that is used as the basis for the
also be mitigated. At the end of the summary are the conclu- subsequent engineering design. Not only does it contain the
sions and recommendations, with discussions on the reserves, technical data and information decided on by the company
the feasibility of the project, the market, the schedule of during the final feasibility study but also the project execu-
the design, construction and start-up as planned in the fea- tion plan for contracting, building, and constructing the mines
sibility study, any preappropriation work contemplated, and of the project. It also contains the operating plan, which will
needed funding. An example outline of the information that guide the engineers and builder to construct the mine/plant
is contained in Volume 1, Management Summary, is shown in so the operating philosophy of the company can be quickly
Appendix 4.7E. achieved and maintained.
Historic information on the activity duration that goes
Volume 2: Project Economics into the project schedule and the functions that will be per-
Prepared by the project executive or project manager, proj- formed in the engineering design and final constructed project
ect economics summarizes the capital and operating costs, is included in the next section. It often appears to laypeople
project schedule, market forecasts, inflation projections (if that building mines and plants takes much too long and costs
constant dollar analysis was not used), and other factors that too much, but this is not the case. What is true is that the
affect the total erected cost and project economics. Identified expectations based on most of the final feasibility studies are
project risks and the measures needed to mitigate those risks overoptimistic, and thus the project begins badly. Data from
should be documented. An example outline of the information case histories are presented in the next section showing what
that is contained in Volume 2, Project Economics, is shown in should be expected.
Appendix 4.7E.
feASiBiliTy AnD PRojeCT TiMing, AnD SCheDule
Volume 3: Technical Narrative The time it takes between the discovery of a resource that
Prepared by the project team, the technical narrative describes may be a potential ore body and when the ore body is brought
the technical basis for the project and lists the design consider- into production can vary significantly. Obviously, with an
ations and constraints. This is the technical meat of the project. extremely high-grade ore body, it may take significantly
The narrative must convey to the future A/E contractor exactly less time to identify enough ore to start mining. Likewise, if
what is to be built and exactly what the A/E constructor is to money can be made no matter how you mine it, then the com-
do and precisely how it will accomplish that. Nothing can be pany may not want to spend a lot of time optimizing the min-
left out. For this reason, all of the drawings prepared during the ing and milling methods (though this could and has proved
final feasibility stage, plus whatever drawings are necessary to be a mistake in the past). On the other hand, it may take
to convey the message to the A/E organization, must be in the many years to define large, marginal mineral resources and to
DBR. The better defined the project is in the DBR, the more optimize every aspect of the study in order to turn the resource
accurate the cost will be to the bid estimates, and the fewer into a viable reserve.
exceptions that will have to be negotiated. An example outline Technological changes over time may also allow the
of Volume 3, Technical Narrative, is found in Appendix 4.7E. property to be developed after many years of study. The other
factor is the ever-changing environmental permitting, which
Volume 4: Project Execution Plan can vary significantly: Although a small punch coal mine
This document, prepared by the project team, defines the real in Appalachia can take less than a year, the development of
and potential problems in the detailed engineering, procure- a world-class zinc/copper mineral resource in Wisconsin
ment, and construction of the project. Furthermore, it goes (United States) was stopped for 20-plus years and finally ter-
on to describe the best plans to ensure that these problems minated, even though it can be demonstrated that the under-
are mitigated or at least minimized. The recommended con- ground mine can be built and operated in a manner that would
tracting plans are spelled out, as are the plans for engineer- be environmentally acceptable anywhere else. Overall it usu-
ing and design, procurement, and construction. An example ally takes from 2 to 6 years just to complete the mineral prop-
content outline of Volume 4, Project Execution Plan, is in erty feasibility evaluation study.
Appendix 4.7E. The overall time from find-to-mine is logically divided
between the classical phases of mineral development:
Volume 5: Operating Plan
• Preliminary exploration and discovery
Prepared by the company’s operations department, the oper-
• Land and water acquisition commitment
ating plan explains how to minimize the impact for identi-
• Exploration
fied potential problems in start-up and continuing operations.
• Feasibility studies/environmental permitting
Although much of the company’s operating philosophy should
• Final engineering
already have been placed into the design as presented in the
• Development and construction
final feasibility study, the writers of the operating plan should
• Start-up to full production
again emphasize the company’s attitude toward mechanization
and automation, and what they are willing to pay for it; and All of these activities vary greatly in length. In this chapter,
its policy on safety and environmental issues and maintenance only the length of the feasibility studies and environmental
and contracting. Such issues as labor recruitment and training permitting will be considered.